AVEO Oncology’s (Nasdaq: AVEO) shares dropped more than 7 percent Monday morning, on news the stock was downgraded by a Boston life sciences investment bank.

A Leerink Swann analyst downgraded the Cambridge, Mass.-based biotechnology company to “Market Perform” – which is equivalent to “Hold” – from “Market Outperform," on risks that its lead product may not be approved by the U.S. Food and Drug Administration (FDA).

AVEO released positive data last week about the rates of progression-free survival for its potential kidney cancer therapy, tivozanib. But Leerink Swann analyst Howard Liang raised significant concern over the fact that another measure of the drug candidate’s success – overall survival – did not show a clear benefit for the drug candidate.

“In our regulatory reviews, we could not find another case where the FDA approved an agent on progression-free survival (PFS) benefit that has a clear unfavorable survival trend,” Liang wrote in his research note.

Liang said the safety data for tivozanib, presented at a conference last week, was “not entirely comforting," and may increase the hurdle for the drug candidate’s approval, especially given there are other kidney cancer treatments out there. There may be limited unmet medical need, he wrote.

AVEO argues the reason the patients taking Nexavar lived longer than those taking tivozanib is that 53 percent of the patients in the Nexavar group switched over to tivozanib. This means more than half the patients in the Nexavar group received two therapies, not one, increasing their overall survival.

AVEO’s shares were trading at $9.29 late Monday morning, down from $9.99 at the previous close.

Health Care/Life Sciences

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